The total annual ISA allowance will remain at £20,000, meaning that £8,000 of your allowance will be exclusively for investments. Remember, this only impacts new money being deposited from April 6 2027 onwards, and doesn’t impact any money you already have in your ISA accounts.
The good news is that although the allowance is being reduced, there are still powerful choices you can make about how your savings work for you, and for the world around you.
Why “where you save” becomes more important
With a reduced allowance, every pound you save counts more. That makes the decision of which provider you choose even more relevant. At Triodos Bank UK you can open a Cash ISA that not only protects the tax-efficient status of your savings, but also ensures your money is being used to finance projects in the UK that deliver genuine social and environmental benefits.
Unlike the mainstream banks, we publish every organisation we lend to, so you can see exactly how your savings are helping. (See “Our guide to ISAs with Impact”)
For example, your savings could support:
Community-owned solar and wind energy installations.
Affordable and supported housing initiatives for people who need it.
Organic farming ventures and local food systems strengthening.
Arts and community spaces that bring creative life to neighbourhoods.
These are not abstract promises. They are the kinds of projects we actively finance, which your money can support.
Our Cash ISA versus a mainstream bank Cash ISA: a comparison
Many mainstream banks offer Cash ISAs with competitive interest rates. However, what they often do not show is where your deposits go. With Triodos, your Cash ISA funds are exclusively used for organisations and enterprises that can demonstrate positive impact. With other providers, your savings may be used to support any number of activities, some of which could include industries you may prefer not to support such as fossil-fuel extraction, arms and weapons or intensive agriculture.
When the allowance is smaller, the value of every tax-efficient pound increases. So, pairing that with a provider whose values you share becomes even more meaningful.
Have you considered a Stocks & Shares ISA too?
Although the Cash ISA allowance will reduce to £12,000 if you are 65 or under from April 6 2027, the overall ISA limit will remain at £20,000 per tax year, meaning you can put the additional £8,000 allowance in a Stocks & Shares ISA. You will still be able to deposit the full £20,000 into your Stocks & Shares ISA if you'd prefer.
If your savings horizon is longer than five years, and you are comfortable with the additional risk, you might want to explore a Stocks & Shares ISA to help to meet your £20,000 ISA limit.
At Triodos we offer a Stocks & Shares ISA that focuses on ethical and impact-driven companies and funds. But remember, investing is not the same as cash savings. The value of investments can go down as well as up, and you may get back less than you put in.
By contrast, mainstream investment ISAs may include companies and sectors you are less comfortable with or do not wish to support. If you want your money to align with your values and pursue growth, an ethical Stocks & Shares ISA can be a worthwhile option, but only if you are comfortable with its risk level.
Explore our ethical stocks and shares ISA
Understanding investing
The Government hopes the Cash ISA allowance reduction will encourage more people in the UK to start investing. We feel what would be more beneficial is financial education around investing, how to understand if investing is right for you, and how it can help you meet long term financial goals. You can read more about if investing is right for you here and more about our different fund options here.
What you can do now
Check how much of your Cash ISA allowance you can still use before the tax year ends, and plan to make the most of the full allowance in 2026.
Ask your current provider: where do your deposits go? Are they published and transparent?
If you want your savings to do more than accumulate interest, consider switching to a provider like Triodos that publishes every loan and shows positive impact.
If your goals are long-term (5+ years) and you are willing to accept some risk, explore our ethical Stocks & Shares ISA and see whether it fits your goals and values. You can start from as little as £25 per month.
Remember: the tax benefits of ISAs depend on your individual circumstances and may change in the future.
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